Apache's earnings improved 16 percent over the previous record, $372 million or $1.13 per share, which was reported in the second quarter of 2004. Cash from operations before changes in operating assets and liabilities totaled a record $883 million in the third quarter, up from $731 million in the year-earlier period.
Apache's third-quarter earnings were reduced by 6 cents per share because of the impact of foreign currency swings on deferred taxes and by 4 cents per share because production was curtailed by Hurricane Ivan.
Apache's worldwide daily production averaged 458,412 barrels of oil equivalent during the third quarter, up 2 percent from the prior-year period. Liquid hydrocarbon production averaged 252,800 barrels per day, up 6 percent from the prior-year period and an 8 percent increase from the second quarter of 2004. Higher production in Australia, the North Sea and China more than offset the impact of Hurricane Ivan, which reduced Apache's U.S. oil production by 4,042 barrels per day during the quarter.
Natural gas production averaged 1.23 billion cubic feet (Bcf) per day, down about 30 million cubic feet (MMcf) per day from the prior-year period, and about 20 MMcf below the second quarter level. Gas production would have been above second-quarter levels had it not been for the impact of Hurricane Ivan.
In the third quarter, production from the Forties Field in the United Kingdom sector of the North Sea averaged 58,000 barrels of oil per day, up from 47,200 barrels per day in the second quarter, while oil production in Australia averaged 32,200 barrels per day, up 45 percent from the second quarter. Apache's share of production from the Zhao Dong block in Bohai Bay, China, rose to 7,900 barrels per day, up 32 percent from the second quarter.
"Apache established a new production record despite the negative effects of Hurricane Ivan," said G. Steven Farris, president, chief executive officer and chief operating officer. "What made the difference was growth in other regions, including a 23 percent increase in production from the North Sea." Apache has drilled approximately 1,500 wells in the first three quarters of 2004.
"With the impact of our recently completed acquisitions in the Permian Basin and the Gulf of Mexico, coupled with our active drilling program, we have great momentum going into the fourth quarter and into 2005," Farris said.
Commodity prices remained strong in the third quarter. Apache received $38.04 per barrel of oil during the third quarter, up 39 percent from $27.34 in the prior-year period; $26.94 per barrel for natural gas liquids, compared with $18.99 per barrel, and $4.77 per thousand cubic feet (Mcf) of gas, compared with $4.45 per Mcf.
Apache's debt-to-capitalization ratio rose slightly to 26.3 percent at the end of the quarter, from 23.2 percent at the end of the second quarter, because of the cost of assets purchased from ExxonMobil and Anadarko Petroleum.
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